Our GPs are the best paid in Europe. Some may even be earning £250,000 a year. How come? And for what?

The doctor will see you now, but be quick. He's off in his Bentley for a game of golf soon, then it's lunch at the Ivy and Switzerland for a skiing weekend. Now, what seems to be the problem?

"Oh, I wish it were true," says Dr Simon Eyre ruefully. But he's only half serious. The 51-year-old is actually worried what his patients might think after a week of headlines about fat-cat family doctors. Outside in the waiting room of his surgery in the Sussex seaside town where we both live, there are men and women on low incomes or benefits who have read about GPs earning a quarter of a million pounds a year. And when the bleeper goes and the red LED sign flashes "Mr Cole Moreton for Dr Eyre", it really is hard not to wonder what size of mint your GP is making from hitting your knee with his hammer.

The national average is about £120,000 a year before tax, according to a survey of 600 doctors reported last week - and a handful of entrepreneur-physicians are earning twice that. A new contract has increased GP pay by nearly a quarter. They are now the best paid in Europe according to the Prime Minister, who thinks they're worth it - but then he used to think we were all getting to see our doctors really easily, until an aggrieved patient put him right on live television. Here at the Lighthouse Practice in Eastbourne, the phones are close to meltdown. It is 8.45am and lines have only been open half an hour, but already the surgery is fully booked for the day. So it's obvious, isn't it? GPs have become more interested in counting their money than curing people.

"Not at all," says Dr Eyre, who has a gentle, reassuring bedside manner from the old school of family doctoring. "If you just did this for the money you would not be able to withstand the pressure of the work."

From the windows of the Ian Gow Memorial Health Centre, a red-brick Seventies building on the Shinewater estate, you can see downland rising in the distance. But Dr Eyre will not get there today. He was in work at 7.30am, reading blood test results, and has 20 patients to see this morning, plus an equal number of telephone consultations to give to those who rang too late to be seen in person. Afternoon surgery will be just as busy. There's no time for lunch any more, let alone golf - but at least he's raking it in, isn't he?

"The figures have been distorted," he says. "A tiny number may be earning that much but most of us are on far, far less. To say otherwise is irresponsible, because it damages our relationship with our patients."

So let's be responsible, and give this story a proper examination. The figure of £250,000 arose from a survey by the Association of Independent Specialist Medical Accountants and was first reported by the BBC last week. Newspapers declared it a scandal, another example of the overspending that has put the NHS hundreds of millions of pounds in debt. Then Sanjiv Gupta from North London was photographed and named as the highest earning in the country, on £270,000. Much was made of the personalised number-plates on his Mercedes, and his large detached house in Hendon - but Dr Gupta protested that he had to pay two other more junior doctors out of that money, to help him meet his case load. He also told a reporter: "It's nobody's business but mine what I earn."

So what is really going on? When Labour came to power in 1997 the country was facing a severe shortage of GPs because of low pay and long hours. A new contract came into effect in April 2004, meaning family doctors need only work from 8am to 6.30pm, and would be rewarded for meeting government targets for the way they treat patients with conditions such as heart disease and high blood pressure.

Unlike their hospital counterparts, general practitioners are not employed directly by the health service. Their skills are hired by local primary care trusts.

Groups of doctors often work together as partners in a practice, a private business that must rent or buy its own premises, pay and train support staff and buy equipment. They may also hire salaried GPs - doctors who are not yet ready for, or just don't want, the responsibility of their own practice - to help them meet the caseload. In that sense, doctors like Sanjiv Gupta are not public servants who can expect to have their earnings disclosed - they are more like entrepreneurs, taking the profits but risking the loss of home and livelihood if it all goes wrong.

The Lighthouse Practice is run by eight partners, serving 15,000 people at two surgeries: one in the centre of town, where many of the patients are elderly and have complicated medical needs, and one on the estate where there are far more young families. Halfway through morning surgery, a courier brings correspondence from the hospital. This takes three-quarters of an hour to deal with: one patient needs to be called in for a chat about what happens next, another case requires the doctor to chase up a consultant. Then there are home visits: one to a man who has terminal cancer and is coming home after two weeks in a respite care bed. "I'll go and see him and talk to social services," says Dr Eyre, "to make sure the support he needs is in place for the weekend."

Lunch is a sandwich in the kitchen next to the reception desk, discussing business with the livewire practice manager, Amanda Sayer. They need to install a new telephone system and find larger premises - but the contract does not allow time for running the business, so much of that work has to be done at evenings or weekends.

Simon Eyre is the executive partner, which means having to be a manager as well as a doctor. He joined the Lighthouse 19 years ago after 10 years of training that included time as a radiotherapist in London and 18 months in a hospital in Kenya. "My motivation is the same now as when I started," he insists. "I am primarily here for people's care and welfare, that is what I am about. It may sound altruistic, but most GPs are in it for the same thing."

Not all of them. Some have found ways to work the system, by manipulating patient lists to get more government rewards, or by setting up as sole practitioners, taking on tens of thousands of patients, hiring lots of young and cheap salaried doctors to do the work and taking home the profits. The front page of the GP magazine Pulse last week lamented the soaring workloads that would result from a new drive to beat chronic kidney disease - but it also carried a story about "cynical" GPs referring more people to hospital in order to win bigger budgets.

So how does the system work? A third of the income for a practice comes from a figure called the Global Sum, paid by the NHS for setting up shop and just being there. There are additional services such as minor surgery that doctors can offer in return for more money. But the biggest and most controversial source of income is the points system, which rewards GPs for meeting targets.

Some of the results have been obvious, even to the most occasional patient: there are 30 points for ensuring that each of us gets 10 minutes with the doctor, for example - which means that if your usually grumpy GP has had a series of quick encounters that morning then she may feel obliged to extend the consultation by asking after the health of your Auntie Beryl and her cat.

The point is that each point is worth money. The Lighthouse gets about £300 a point. Last year it was awarded 1,049 points - one short of the maximum - so earned £314,700.

The British Medical Association says that the system works: 8,700 fewer people will have heart attacks, angina or strokes in the next five years, says the BMA, because the new targets reward doctors for keeping a closer eye on patients with high blood pressure. But it costs.

Overall, the Government expected GPs to meet 74 per cent of the targets in the first year - but they actually achieved 91 per cent, costing the NHS £140m more than had been budgeted for. Something similar happened last year too.

Back at afternoon surgery, Dr Eyre has another 15 patients to listen to, including a woman who has been vomiting for five days, has now developed a rash and fears meningitis. "I told her not to worry too much, it was probably an allergic reaction."

He finishes at six, but goes home to answer a host of emails about urgent practice business. Medical care is now provided by Seadoc, a co-operative of local doctors who work nights or weekends for extra payments. "It is true we are paid more for doing fewer hours now," says Dr Eyre. "It was more than 70 hours a week including nights. Now it is down to about 55 - but the intensity of what we do is far greater than it was."

Before the new contract, the average GP was earning around £80,000. So now the crucial question, before the consultation ends: how much are you on, doctor? Tell me the worst, I can take it. Simon Eyre smiles again, shakes his head a little, and tells me carefully that the Lighthouse partners earned an average of £105,000 each last year, before tax and national insurance.

Yes, he acknowledges, that would seem like a lottery win to many of his patients - some of whom work as hard or as long for far less money. But for a long time, he says, GPs felt less valued than hospital doctors, despite their experience, training and responsibilities. Now their true worth is being recognised, he argues. "We act as a filter for the hospitals, so that nobody is sent there unless it is necessary."

It works the other way too: the other day he saw a woman with severe headaches who had been given a new sort of treatment by a consultant at a London hospital. It helped the headaches but made her asthma much worse, so it didn't work for her. "I had to pick up the pieces of the hospital treatment and advise her what to do." Most of us have most of our contact with the health service through GPs, says Dr Eyre, and that will only increase. "Without the infrastructure we provide, the NHS would crumble. I don't think people fully understand that."

HEALTHY WAGES

36,000

THE NUMBER OF GPs PRACTISING IN BRITAIN, which means there is one general practitioner for every 1,679 people. Most operate in equal partnership with others. However, some GPs set up lucrative super-surgeries with themselves as the sole practitioner and use cheaper, usually more junior, salaried doctors to serve tens of thousands of patients.

52.5

THE AVERAGE HOURS WORKED BY A GP IN A WEEK, according to the British Medical Association, since a new contract came into force on 1 April 2004. Before that, the average was 75 hours including nights and weekends.

£65,000

THE AVERAGE GP INCOME BEFORE THE NEW CONTRACT, a relatively low figure compared to hospital doctors with similar experience and length of training.

£94,000

THE AVERAGE GP INCOME LAST YEAR, according to the BMA. The result of the rise, better working conditions and a recruitment drive has been a 68 per cent increase in the number of doctors training, the Prime Minister says.

£120,000

THE AVERAGE GP INCOME NOW before tax, according to a survey by specialist health accountants. Some doctors appear to be on as much as £270,000 a year.

What does the doctor do all day?

8am The new contract for all GPs that came into force two years ago requires them to start at this time, but many get in earlier to read blood-test results and letters from hospitals

8.30am The first patient. GPs earn points (and ultimately pounds) by meeting targets. Bringing down the blood pressure of 70 per cent of patients with hypertension is worth 56 points

11.30am Home visits. The number has been reduced by offering patients who cannot get an appointment a chat on the phone, but some elderly and sick people still need to be seen

1.30pm A working lunch with other partners in the practice. The contract sets out the time that must be spent treating people. Running the business has to be done in doctors' own time

2.30pm More patients. Measuring the peak flow readings of 70 per cent of people diagnosed with asthma earns 15 points. Practices can earn up to 1,000 points, and each is worth, on average, £124

4pm Out on the road again, seeing people at home. This man has coronary heart disease. Keeping a register of patients like him is worth six points, and treating half of them with beta blockers earns seven

5pm Patients have to be given at least 10 minutes each for the practice to earn 30 points, but some consultations take far longer. The patient is weeping but can't say why, and outside, people are waiting

8pm The official working day finished an hour and a half ago, but there are still letters to sign. Stressed out by not meeting anti-smoking targets, doctor has a fag. At least she can afford it, on £120,000 a year

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